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Netflix Stock Rises on Stellar 4Q17 Results

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NFLX stock rose more than 24% last week

US-based (SPY) Internet streaming company Netflix (NFLX) saw its stock rise more than 24.0% in the week ended January 26, 2018, to close at $274.60. Netflix stock is trading 99.0% above its 52-week low of $138.26 and is at its 52-week high.

In the trailing-12-month period, Netflix stock has risen more than 97.0% after rising 55.0% in 2017.

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Netflix beat estimates in 4Q17

Netflix (NFLX) announced its 4Q17 results on January 23, 2018, and reported revenues of $3.3 billion. Its net profit was $185.5 million (or $0.41 per share) compared with EPS (earnings per share) of $0.15 and net income of $66.7 million in 4Q16.

Netflix added 8.3 million subscribers in 4Q17, which was its highest customer addition metric in a single quarter. Notably, 6.4 million customers of the 8.3 million were international subscribers, indicating a substantial growth rate for its overseas markets.

Subscribers were primarily driven by popular shows such as House of Cards, Stranger Things, and The Crown. Netflix has invested significantly in original content to attract more subscribers. After its 4Q17 earnings report, Netflix said it would invest $7.5 billion–$8.0 billion in original content in 2018.

Driven by the company’s aggressive spending on content, its free cash flow is negative and ended fiscal 2017 at -$2.0 billion. However, Netflix expects its free cash flow to reach $3.0 billion–$4.0 billion in 2018.

Netflix spent ~$6.0 billion last year on creating original content compared to $4.5 billion for Amazon (AMZN) and $2.5 billion for Hulu.

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